By Ray Birch
CAMARILLO, Calif.—It’s never been more important to get the pricing and payment details right with online quotes for potential car buyers, says one automotive marketing firm, who cautions that doing otherwise—even if it’s a $50 difference in monthly costs—markedly increases the risk of the buyer walking away.
The advice, says Rusty West, president and CEO of Market Scan, applies to auto dealers’ and credit unions’ auto buying sites.
West spoke with CUToday.info about the growing need for greater transparency in auto deal pricing, an issue that has come to the forefront during the pandemic. He said that often,online car buying sites that require the buyer to walk into the dealership to close the deal find the offer is not the same as what was provided digitally.
“This is fast becoming one of the largest pain points for online car shoppers,” said West. “There is a growing disconnect between what's quoted online and what’s presented when buyers come into the store—and that's a huge problem.”
Compounding the issue, emphasized West, is consumers have gotten spoiled by the accuracy and ease of use of online shopping sites like Amazon.
“Amazon is the standard by which digital retailing is done,” West said. “You go to the website, find what you want to buy, you know what it’s going to cost, you click a button and pay, and the item sometimes even shows up the next day. This is changing consumers’ expectations of how online shopping—all kinds of online shopping—should perform.”
Risk to ‘Trust’
West acknowledged that in prior years, and especially during the pandemic, auto dealerships may have become comfortable with—and consumers even expected—prices and payments varying slightly from the online details.
“Shopping for a car is typically the second-most expensive purchase outside of buying a house,” said West. “We now want to know that the car we're getting excited about we can actually afford. That means the selling price, and really the monthly payment, has to be the same as what we are quoted online. Anything else and we lose trust in the dealership, or the credit union, and often stop the transaction.”
Market Scan’s new survey highlights consumers’ mounting frustrations, West said.
The company commissioned an online survey during January where it polled 200 automotive shoppers on their pain points associated with the digital retailing process.
Rusty West
Price and payment negotiation remain among the most important aspects of the car shopping experience for consumers, with the study showing nearly half of all respondents (45%) say price and payments matter to them the most.
“Again, the disconnect between shopping online and the experience at a dealer showroom remains a major headache for many,” said West. “In fact, when it comes to online shopping, 49% said they need to restart the entire process when they arrive at the dealership after doing all their homework online, ahead of time.”
Consumer Frustration
West said 43% of car shoppers say they are frustrated there are discrepancies between the online offer, and the one they are presented with at the dealership.
“Twenty-one percent of shoppers say they begin to lose trust in their dealer when the discrepancy between the online offer and showroom offer is $50 or less per month,” West said. “And, 21% said they will actually walk away from the deal if the discrepancy is $50 per month, and 48% said they will walk if the difference is $75 per month.”
But should dealers and lenders expect the new emphasis on online accuracy will lead to a race to the bottom in pricing?
“Not at all,” said West. “Consumers said they may be willing to even pay a little extra for the convenience of a true online shopping experience. Just over one-third (34%) said they would sacrifice a little negotiating power to offset additional costs required for an ideal online shopping process that transitions seamlessly to the showroom experience.”
An ’Imperative’
As other analysts have stated, COVID-19 is making digital sales an integral part of automotive retailing.
“Dealers now must have an omni-channel presence and it is imperative that they provide consumers payment transparency and consistency throughout the entire journey,” said West, adding lenders will find more success in choosing dealers that are transparent. “The survey results emphasize the importance of providing a scientifically perfect solution for any conceivable automotive transaction. When science, technology, data and automotive insight are applied correctly, it enables manufacturers, lenders, and retailers to provide consumers a frictionless, modern retailing experience—both online and in the dealer sales showrooms. And when that happens, everyone wins.”